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Russia's economic resilience is exhausted due to the invasion of the war and sanctions in Ukraine, and the people face high costs in 2025: car recovery fees rose to 2 trillion rubles, leading to the price of imported cars; value added tax rose from 20% to 22%, each household paid more than 4.550,000 rubles; public utilities such as hydroelectric power increased by 9-14%, and more than 6,000 rubles per year.
Often, a country has developed economic systems because of the start of the war, which leads to a huge change in the conditions and rules of economic operation, which naturally affects the daily life of the people. But if through the use of the state's savings and financial loans, concentrated investment in the military sector, may cover up the outbreak of the problem in a few months or even two or three years, but because of the large increase in economic costs and the huge distortion of the economic structure, a greater crisis will breathe.
This cover-up has helped the Kremlin to talk from 2023 to 2024 about the unprecedented resilience and strength of the Russian economy, talk about the incredible well-being of the Russians, and announce that the Russian people are not affected by any of the wars. However, now it seems that the resources of the Kremlin to cover the problems have basically exhausted, and the capabilities have been exhausted. Now, in 2025, in the face of the negative effects of sanctions and war on Russia and the new outbursts of increased debt and distorted economic structures to cover these negative effects, every Russian can not escape, because they have begun to feel and estimate how much the war has cost him and his family.
Regardless of whether they are ordinary Russian officials or teachers, whether they are Russian military or factory workers, they now feel the unprecedented fiscal deficits of the Kremlin when the Kremlin spends all of its national savings, compels Russian commercial banks to give out loans that can not continue to increase, the technical bureaucrats of the Russian Ministry of Finance drafting budgets tremble with the latest legislative initiatives, the Presidential Decree signed by Putin, and the Russian Ministry of Economic Development’s forecasts and tax innovations, and all the tricks to hide the real scale of withdrawals in citizens’ wallets.
In particular, they include:
1. Recycling fee: Car buyers pay more than 2 trillion rubles in additional payment every year.
Starting from November 1, 2025, new recycling rates for imported foreign cars lobbied by the Russian Ministry of Industry and Trade for Russian automakers will take effect. This is not only protectionism, but also contributes significantly to budget revenue, which is widening sharply.
The new rate not only takes into account the size of the car’s engine, but also the power of the car. Moreover, it doesn’t matter now whether the car is imported or used: any foreign car with a capacity exceeding 160 horsepower will have to be repaid. The scale of the repaid rate is gradual and will increase every year until 2030.
The starting point for the reimbursement is 20,000 rubles, the larger the engine power, the higher the car’s sale price, the higher the reimbursement fee, just as the increase in the reimbursement fee leads to the increase in the price at the end of 2024, this time the reimbursement fee will also result in the price of all imported cars again to rise drastically. For example, 1 Gillemon Haro, the reimbursement fee is 84,2 million rubles, 1 Toyota RAV4, the reimbursement fee is 19,7 million rubles, 1 BMW X5, the reimbursement fee is up to 276,4 million rubles.
Prices for all cars will rise as buyers turn to cheaper models. Yes, the same is true for AvtoVAZ cars, so switching to barrel is not an option.
The new recovery rate will also continue to rise.In the fiscal budget it is revealed that the budget planned for next year to receive from recovery will be 1.5 times this year, approximately 1.65 trillion rubles, to increase to 2 trillion rubles in 2027 and continue to increase to 2,7 trillion rubles in 2028.
2. Value-added tax: at least 45,500 rubles per family.
The Ministry of Finance of Russia proposed to increase the value added tax rate from 20% to 22% starting in 2026.In addition, the threshold for the simplified tax system for small enterprises not paying value added tax will be reduced by 6 times, from annual turnover of 60 million rubles to 10 million rubles.In fact, starting in 2026, almost all small enterprises will pay value added tax, except for micro-enterprises and individual operators.
The Ministry of Finance expects the increase in the value added tax rate to bring an additional 1.4 trillion rubles to the budget, and the total value added tax revenue will increase by 3 trillion rubles.
As an in-price tax, value-added tax is paid by the end consumer. According to the 2021 census of the Russian Statistics Office, there are approximately 66 million households in Russia. In fact, the quality of the census makes demographers question that 140 million Russians have so many families, but makes us believe official statistics. This means that next year alone, due to value-added tax alone, each household will pay about 45500 rubles more on average for goods and services. In fact, the overpayment will be even greater because companies will have to overprice goods and services for cash gaps: VAT refunds are much slower than commodity turnover, and inflation will not disappear regardless of the government's forecasts.
3. Price increase of public goods such as water and electricity: starting from 6,000 rubles per year.
According to the forecast of the Russian Ministry of Economic Development, next year, the prices of public utilities with regulated services will not start to rise from July 1 as usual, but will start to rise from October 1 this year. There is one explanation for this-the price increase should have occurred after the parliamentary election. Because when they see the new bill, people will probably still cry loudly and express their indignation at the voting results.
This means that there will be another wave of utility price increases next year, and the increase will probably not be worse than this year-remember how stunned everyone was when they received their July bills in August? Because of this, there was not even a traditional seasonal decline in CPI month-on-month in August.
The plans revealed by the Ministry of Economy are that gas prices will increase by 9.4%, electricity prices will increase by 10.9%, transmission prices will increase by 14.3%, water supply and sanitation will increase by 9% and 9.5% respectively. In addition, the price of housing and public services will increase by 9.6% overall.
Based on comparable indexed data this year, the average growth rate is assumed to be below 12%, but in fact, in many regions, utility prices have risen by more than 20%.
The increased prices of utilities have indirectly entered the fiscal budget: taxes and dividends from natural monopolies participating through the state.While some utility prices increase will not necessarily lead to these revenue increases, such as the housing and utility industries are traditionally unprofitable, although the utility prices in the sector have increased hundreds of times during these years of transition to the market track. For example, the Russian Gas Industry Corporation is simply trying to compensate for the losses caused by increasing the prices of domestic natural gas users, but this does not prevent the utility sector from continuing to spend money on expensive construction projects and the luxury wages of senior managers through price increases.
In the first half of 2025, the average payment for Russian household housing and public services was 4115 rubles, which did not include electricity and gas charges. For the electricity charges of houses with electric furnaces, they paid an average of 700-850 rubles. For gas in houses of an area of 100 square meters, equipped with gas heating and hot water supply, it will cost about 67,000 rubles in 2025.
This is the minimum, and in fact, paying more is likely to be much higher.
The government’s constant paying money from the family’s wallet was the price of the Russians’ tacit war.
For the above three items alone, each Russian family will spend an average of 82000 rubles more on purchases next year. At least an additional 6000 rubles are spent every year to increase the price of utilities, an additional 30333 rubles are spent on new cars, and an additional 45500 rubles are spent to pay new value-added tax.
Of course, this is not the entire cost. Gasoline prices in September 2025 have increased by 50% compared with the end of last year, and will obviously continue to rise; the prices of all imported products will rise again; the prices of drugs will also rise; the prices of daily necessities and services produced in the country are also increasing by about 10% every year.
However, the income of Russians will not rise as it did from 2022 to 2024. It will start to decrease in 2025. Wages in military enterprises will start to decline, and wages in other sectors will fall even more.
At the same time, Russian administrative agencies are still learning the skills of increasing government revenue by increasing tax rates from the Ministry of Finance and raising public utility prices from the Ministry of Economy. For example, social security agencies have submitted proposals to the Duma to deprive various types of preferential insurance contributions (pension funds and social insurance funds). In particular, this will affect the entire IT department: employees with salaries less than 230 thousand rubles will become unprofitable for the company, because IT is time to start paying insurance premiums for them.
Most importantly, now there is no doubt that all these costs and deprivations will become the cost of the Russian invasion war launched in Ukraine.So when the Ministry of Finance put forward the budget for next year and the next few years in a press release, it directly wrote: “Strategic priorities are financial support for national defense and security needs, and social support for families participating in special military operations.”
What can the 1.4 billion Russians say about it?In Russia, war is a crime, and war is a crime.
We are not Russians, we have the opportunity to shout out: Peace, not war!
The Author: Xu三郎